President Bush's statements about Iran come at a time when that country is growing friendlier with Iraq. Iran is developing trade and diplomatic ties with its neighbor, and that's happening at the same time the United States says Iranian agents are provoking violence there.

Let's go to Joost Hiltermann, the Middle East Project director of the International Crisis Group, who monitors this situation from Amman, Jordan. Welcome to the program once again.

INSKEEP: What are some of the ways that Iran is increasing legitimate ties with its neighbor Iraq?

Mr. HILTERMANN: Well there are growing business ties between Iran and Iraq. There is thriving religious tourism between Iraqis going to Iran to the holy sites there, and vice versa, Iranians going to the holy sites in Karbala and Najaf. And there is significant trade in crucial goods for the Iraqis in terms of cooking gas, and kerosene, and electricity, which they lack.

INSKEEP: And then Iran's ambassador to Iraq tells The New York Times this week that his country is prepared to expand economic ties and military ties with the Iraqi government, to provide them training, equipment, advisers, other things to fight their internal enemies, if they need it.

Mr. HILTERMANN: The fact of the matter is, is that the Iranians and the Iraqis have had a recently bad experience in the 1980s with the Iran/Iraq War. And the Iranians want to make sure that this experience will never be repeated. They don't want to be invaded. They don't want to be gassed. And they have a government in power now in Iraq that is broadly sympathetic to them, and so they have a great opportunity to develop really positive trade, military, and other relations with Iraq.

INSKEEP: So we could be close to an Iraqi government that gets military assistance from Iran and the United States, two countries that are enemies in most other ways.

Mr. HILTERMANN: And I think if you look at the calculations that the Iraqi government is making, they reckon that the United States is here today and gone tomorrow, but the Iranians are going to be around for a long time. The main parties in the governing coalition in Baghdad are the two Kurdish parties and the Supreme Council for the Islamic Revolution in Iraq. And these parties have a historic link with Iran. In the 1980s, during the Iran/Iraq War, they even fought on the Iranian side.

INSKEEP: Mr. Hiltermann, I want ask about the implications of this. You have Iran, a Shia Muslim-dominated country, offering to expand its assistance, including military assistance, to the Shia-dominated government in Iraq. That government is fighting Sunni Muslims in Iraq and there are a bunch of Sunni Muslim countries around Iraq. How are Sunni Muslims governments likely to respond if they see Iran increasing its influence in Iraq?

Mr. HILTERMANN: Well, they are quite anguished about it, I would say, if not hysterical. They are very worried about Iranian aspirations to regain their preeminence in the Gulf. They are hoping or willing to support Sunni insurgents in Iraq as a wall against what they see as a growing Iranian expansionism in Iraq, through Iraq.

INSKEEP: Could you have an arms race, in a sense? Iran sends weapons to one side inside Iraq and other countries send weapons to the other sides?

Mr. HILTERMANN: You could easily have that. And of course, some of these weapons are already arriving, or military training, or financial support. And we could easily have in the very near future an outbreak of a proxy war in Iraq. And to some extent people say that's already happening, where the insurgents are supported financially by Arabs states, maybe in the Gulf, and the Shiite militias are supported by Iran.

INSKEEP: Does this mean that the United States needs to worry even when Iran makes a constructive move into Iraq, which is how these offers of help could be construed?

Mr. HILTERMANN: Well, you know, the Iranians have benefits from a stable Iraq and a friendly Iraq, and a relatively weak Iraq. They want to keep it that way. They don't benefit from civil war. And I think that is a very important basis of consensus between Iran and the United States on which you could negotiate over the future of Iraq. And I think there is really room for engaging in Iran on this issue.

And I'm afraid to say that at the moment the talk in Washington seems to be more of confrontation than actually trying to understand what the interests of Iran are in the region and to work with that.

INSKEEP: Mr. Hiltermann, good to talk with you again.

Mr. HILTERMANN: My pleasure. Thank you.

INSKEEP: Joost Hiltermann is the Middle East Project director of the International Crisis Group. And you heard him on MORNING EDITION from NPR News.

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